29 March 2001 External T.I. 2000-0063095 - DONATION RECEIPTS FOR VOLUNTEER EXPENSES

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Whether donation receipts may be issued to volunteers for expenses incurred on behalf of a charity.

Position: Where charity has reimbursed a volunteer for expenses and the volunteer later chooses to give the charity some or all of the reimbursement funds, there may be a gift for which a donation receipt may be issued. However, where a charity has a standard policy of reimbursing volunteers by way of issuing a donation receipt for the amount of the expense claims, it is our view that there has been no gift to the charity for which a donation receipt may be issued

Reasons: For there to be a gift for which a donation receipt may be issued, there must be a voluntary transfer of property from the donor to the charity, without any expectation of return or benefit to the donor or a person designated by the donor. Where the charity has a policy that it will reimburse volunteers by issuing donation receipts for the amount of the expenses, it would seem that there has been no voluntary transfer of property to the charity.

XXXXXXXXXX 					2000-006309
						Alison M. Campbell
March 29, 2001

Dear XXXXXXXXXX:

Re: Receipting of Volunteer Expenses

This is in your reply to your letter of December 20, 2001 wherein you asked for our comments on the issue of giving charitable donation receipts to volunteers of your organization for personal expenses incurred as volunteers for the organization. Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we are prepared to provide the following comments.

Charitable donation receipts are only to be issued by a registered charity in respect of gifts received by the charity. As is set out in paragraph 3 of Interpretation Bulletin IT-110R3, a gift will generally be considered to be made if all three of the following conditions are satisfied:

a) some property, usually cash, is transferred by a donor to a registered charity;

b) the transfer is voluntary; and

c) the transfer is made without expectation of return. No benefit of any kind may be provided to the donor or to anyone designated by the donor, except where the benefit is of nominal value.

Any time a charitable donation receipt is issued, it should be in respect of a donation that satisfies these three criteria. In general, the Agency will accept that a gift for which a donation tax credit can be issued, will have been made where;

a) the volunteer has incurred the expenditures on behalf of the charity,

b) the volunteer has a right to be reimbursed for such expenditures by the charity under an agreement between the volunteer and the charity,

c) the charity issues the volunteer a cheque for the amount of the expenses claimed by the volunteer and which are supported by receipts, and

d) the volunteer, of his own volition, chooses to give some or all of the reimbursement monies back to the charity (i.e. there can be no agreement or understanding, written or oral, that the volunteer will return the reimbursement to the charity)

Where the charity does not issue a cheque to the volunteer that the volunteer is free to either keep or donate back to the charity it will depend upon the particular facts surrounding the arrangements between the charity and the volunteer whether a gift has been made by the volunteer to the charity. For example, where a charity has a policy that expenses incurred by a volunteer will only be reimbursed through the issuance of a donation receipt, it would be our view that the volunteer has not made a gift for which a donation receipt can be issued, because there has not been any property voluntarily transferred from the volunteer to the charity.

We trust that our comments will be of assistance to you.

Yours truly,

F. Lee Workman
Manager
Financial Institutions Section
Income Tax Rulings Directorate
Policy and Legislation Brach